The Flossmoor Village Board took the first step to approving a 2020 tax levy that would mark a 1.44% increase over last year’s extension.
Village officials are trying to navigate enacted legislation, a lack of new development and tax caps. The village's levy will be submitted to the Cook County Clerk's Office, which will determine a final number by summer 2021.
Illinois property tax cap legislation allows for increases of 5% or the Consumer Price Increase (CPI), whichever is less. Flossmoor's levy is lower than the 2.3% CPI for the calendar year.
The village board voted 6-0 Monday, Nov. 2, to approve an estimated tax levy of $6.71 million, up $95,259 from the 2019 extension of $6.62 million. A vote to approve the final levy is expected Dec. 7.
When the village levy is combined with the Flossmoor Public Library’s estimated levy of $1.46 million, the total levy would be $8.17 million. That would be a 1.64% total increase over last year’s combined extension of $8.04 million.
The estimated impact to a taxpayer whose home has a market value of $200,000 would be an increase of around $17, according to a report presented to the board by Finance Director Scott Bordui.
Bordui presented the board with three options for the levy on Nov. 2, one of them broken down into three possible approaches. Bordui in his report called it “another complex levy” because of legislation, Cook County’s interpretation of it, tax caps and what he said was “very little new property in the village in 2019, no new development.”
Bordui said that marks the first time in years the village has not had new development to consider with the levy.
Bordui explained that legislation imposes ceilings on three levy lines — corporate, police and fire — and allows them to meet statutory taxing maximums. The law does not, however, allow for a corresponding increase to the total tax cap. In Flossmoor, equalized assessed valuation (EAV) fluctuations have forced levies below those ceilings, according to his report.
The approach the board has opted to follow reduces the capped ceiling lines proportionately while not reducing capped, non-ceiling lines at all. This approach allows for fully funding the lines tied directly into specific costs, but causes the capped ceiling lines to be below the full amount available based on the village’s EAV, according to Bordui’s report.
“Because of tax caps, we are unable to levy all the way up to our tax assumptions,” Bordui said.
Flossmoor also has been facing the impact of pension reform legislation dating back to 2011 involving funds for police and fire. Changes included a second tier of reduced benefits, calculation methods for minimum contributions and penalties for municipalities not meeting those minimum payments.
Bordui called those pensions “particularly impactful this year.” His review back to 1996 shows pensions accounted for only 7.5% of Flossmoor’s levy, but now they constitute roughly 23.3%. Conversely, the general corporate levy had dropped as a percentage of the total capped levy from 32.5% in 1996 to 17.5% in 2020. For the first time ever, the police pension levy is greater than the general corporate levy, according to Bordui’s report.
Mayor Paul Braun said pension contributions have just “gone up and up and up,” with no relief in sight.
“I’m stunned here by the pension situation,” Braun said.
Braun asked if village administrators should consider reducing the contributions that were not statutorily required and instead spread that money to other funds. He said he was banking on the idea that statewide changes to pensions could be coming down the road.
“The rules are going to be changing on pensions in this state,” Braun said. “They have to.”
Village Manager Bridget Wachtel said one of the greatest forms of relief from the state would be if the pensions were moved outside of the tax cap formula. But that is not being considered by the state at this time, she said.
Several trustees — including James Mitros, Joni Bradley-Scott and Perry Hoag — said they agreed with Bordui’s recommendation to fund the pensions as recommended.
“I am in favor of Scott’s recommendation, and that’s the recommendation I want to follow,” Mitros said.
Mitros asked why the village would alter anything at this point, noting Bordui has kept Flossmoor heading in the right direction. He worried about what deviating from the recommendation could do to the village’s favorable credit rating. He urged the board to wait and see what happens first, regarding any possible state changes.
“Why would we take any chances with that?” he said. “Let’s figure out what they’re thinking and react.”
Bordui urged trustees to stick with the plan.
“I think it’s prudent to follow the actuary recommendation, my recommendation,” he said.